The two models that are commonly used to explain the relationship between advertising and sales are the:
A)concave-downward function and the S-shaped response function.
B)S-shaped response function and the concave-upward function.
C)marginal utility function and the S-shaped demand function.
D)S-shaped demand function and the contribution margin function.
E)concave-upward function and the S-shaped demand function.

Question

Quizplus · Accepted Answer

The concave-downward function and the S-shaped response function are the two models commonly used to describe how advertising impacts sales. The concave-downward function suggests diminishing returns on advertising, while the S-shaped response function indicates that advertising has little effect at low levels, more effect at moderate levels, and again less effect at high levels.

The Two Models That Are Commonly Used to Explain the Relationship